U.S. posts $181 billion budget deficit for July

RonaldD. Orol

WASHINGTON (MarketWatch) -- The U.S. government ran a budget deficit of $180.6 billion in July, marking the 10th straight month of red ink, the Treasury Department reported Wednesday.

The monthly deficit pushed the cumulative deficit so far this year up to $1.26 trillion -- slightly more than the Obama administration's been projecting for all of the 2010 fiscal year. Fiscal 2010 begins Oct. 1.

Outlays amounted to $332 billion last month, the Treasury said, up 26% from July 2008. Receipts were $151 billion, down from $215 billion in June and 6% lower than a year ago.

For the year to date, total receipts hit $1.7 trillion, down 17% from a year ago, while outlays stood at about $3 trillion, up 21%.

Individual income-tax receipts dropped off in July, to $64.8 million from $92.9 million in June. Corporate income-tax receipts dropped dramatically as well, to $2.5 million in July from $32.5 million in June.

The Treasury allocated $7.2 billion in July to its program for buying Fannie Mae and Freddie Mac mortgage-backed securities. The program, intended to revive the market for mortgage financing, has had $153 billion in liabilities so far this fiscal year.

In addition, the Treasury spent $85 billion for its housing and economic recovery program, which includes buying preferred stock from both Fannie and Freddie.

On another front, the Treasury spent $22 billion of its $700 billion Troubled Asset Relief Program in July, bringing fiscal-year 2009 spending to $169 billion, the agency's figures showed.

Financial institutions that took money from the program paid back $3.5 billion to the Treasury last month.

For the full fiscal year, the administration continues to expect a deficit of $1.84 trillion. Those number are likely to be revised, however, since the economy has been far weaker than was originally estimated.

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